In a joint statement released on 28 March, the organisations called on the Department of Mineral Resources and Energy to implement an urgent, temporary adjustment to the fuel pricing mechanism, arguing that current conditions are adding to uncertainty and distorting supply behaviour.
The warning follows a rapid survey conducted between 24 and 27 March among farmers and fuel retailers, which revealed widespread reports of constrained diesel supply and tightening access across multiple regions. While national fuel supply has officially been described as stable, AgriSA and Agbiz say conditions on the ground suggest otherwise.
Rationing spreads across regions
According to Agbiz CEO Theo Boshoff, about two-thirds of fuel retailers serving the agriculture sector are now rationing diesel, with daily limits ranging from as little as 50ℓ to 500ℓ per customer.
Although no single region has been singled out as uniquely affected, the Southern Cape and Eastern Cape appear to be under particular pressure, although this may reflect survey participation rather than the full national picture.
The constraints come at a critical time in the agricultural calendar. Summer crop producers are preparing to harvest, while winter cropping regions are gearing up for planting, both highly fuel-intensive activities. Diesel can account for roughly 16% of input costs in field crop systems, placing producers in a vulnerable position when supply tightens.
Horticultural sectors are also vulnerable, especially citrus producers entering peak export season, where fuel is essential not only for production but also for transport and maintaining cold-chain logistics.
Behavioural pressures compound supply issues
Boshoff said the situation is being driven by a combination of global and local factors rather than a single factor.
Global oil market volatility, partly linked to geopolitical tensions affecting key supply routes such as the Strait of Hormuz, has contributed to price increases and sourcing challenges. At the same time, expectations of imminent fuel price hikes have triggered stockpiling by both consumers and intermediaries, further tightening short-term availability.
This combination of physical supply constraints and behavioural responses has created what Boshoff described as a “feedback loop”, where uncertainty itself becomes a driver of scarcity.
Call for more agile pricing system
Boshoff said Agbiz, together with AgriSA, is proposing an out-of-cycle fuel price adjustment, alongside more frequent price reviews, potentially on a weekly or biweekly basis instead of the current monthly system.
He explained that the existing pricing mechanism, which is based on the previous month’s average oil price and exchange rate, introduces a lag that encourages speculative behaviour.
“A more responsive pricing model would reduce the incentive to stockpile and allow prices to reflect underlying market conditions more accurately,” the organisations said.
In addition, Boshoff said Agbiz has also proposed that National Treasury consider a temporary reprieve on the fuel levy and Road Accident Fund levy, similar to measures implemented during the COVID-19 period, to cushion producers and limit knock-on effects on food prices.
Food security risks remain contained for now
Fuel typically accounts for between 12% and 18% of agricultural production costs, making it a critical input across the value chain.
Boshoff said the immediate risk to production remains contained, provided supply stabilises in the coming weeks. Increased purchases in March mean many farmers have built up on-farm reserves, which could act as a short-term buffer.
However, he cautioned that if constraints persist into April, the risk profile could shift rapidly, particularly for logistics and transport, where fuel shortages would directly affect the movement of goods to market.
“The biggest impact is likely to be on production costs rather than outright production stoppages,” Boshoff said, adding that prolonged disruption could ultimately feed through into higher food prices.
Engagement with government ongoing
Boshoff confirmed that Agbiz is engaging with government on the proposed interventions, though no formal response has yet been received. He emphasised that the proposals are intended as temporary measures to address exceptional volatility, rather than permanent structural changes to the fuel pricing system.
For now, all eyes are on the upcoming fuel price adjustment and expected resupply in April, which industry stakeholders hope will ease pressure and restore normal market functioning before the situation escalates further.
